SMT Inks Deal To Acquire IDS, Looks Beyond Sports
In a move that was decades in the making, SMT (SportsMEDIA Technology Corp.) has acquired Information and Display Systems (IDS), combining two of the biggest names in live-data-driven scoring and graphics.
Having focused almost exclusively on real-time data and graphics integration for live sports television in the past, SMT has now broken into the in-venue market with the acquisition of IDS, a provider of scoring, statistics, and display products/services at sports venues all over the world.
“From a synergy standpoint, getting these two companies together makes a whole lot of sense,” says SMT President/CEO Gerard J. Hall. “We have always lived in parallel universes in that we provide very similar products but didn’t actually bump into one another enough to be considered [direct competitors]. But we’ve always respected the way the other has done business.”
IDS will be a wholly owned business unit of SMT, with Hall as CEO over both companies. He will retain the title of president of Durham, NC-based SMT. IDS co-founder Rallis Pappas will remain president of IDS, which will continue to operate intact from Jacksonville, FL, as an IDS-branded division of SMT. Financial terms of the deal were not disclosed.
A World Beyond Sports
The acquisition is the first in what is expected to be an ongoing expansion effort by SMT, which secured growth funding from Vincente Capital Partners (VCP) in September 2010 and is now looking to break into markets outside sports and beyond North America.
“This acquisition makes a lot of sense on the sports side and then also has the potential benefit of growing beyond that [into other markets],” says Hall. “This could have all sorts of applications beyond sports, given that that is our strategic vision and we now have the capital to start investing in [non-sports markets].”
Hall sees a variety of potential outlets for SMT and IDS products outside of sports, including SMT’s telestration/zoom systems for the military market, its SMART virtual-insertion products for medical imaging, and IDS’s IPTV distribution offering in closed-circuit television environments.
Decades in the Making
This is not the first time the two companies have crossed paths, having teamed up on projects dating back to the creation of the PGA Tour’s live-scoring system in the early ’90s. Nearly 10 years ago, Hall and Pappas actually discussed the prospect of the two companies’ joining in an alliance given their similar product offerings, but the stars never aligned to make it happen.
Then, last June, IDS was looking to recapitalize its corporate structure and began actively shopping for a strategic partner. SMT, which was already on the acquisition offensive, became an obvious choice. The two companies began talks in the fourth quarter, and the IDS board ultimately approved SMT’s proposal.
A Win-Win Deal
On paper, the deal makes sense for both parties. Through IDS, SMT immediately becomes a major player in the live-event scoring and display sector and will have better integration opportunities with the IDS-designed official scoring systems for the PGA, USTA, NBA, NHL, UFC, Dew Tour, and others. In addition, IDS opens the door internationally, having provided on-site scoring systems and displays to Wimbledon, the French Open, the Australian Open, the London Olympics, and the British Open.
IDS, on the other hand, gains greater access to live-event broadcasters, a stronger financial structure and access to growth capital for R&D, and access to markets beyond sports as SMT expands.
“SMT’s and IDS’s mutual goal for the combined company is that, together, we become more scalable, more robust, and more capable from a resource perspective,” says Pappas, “so we may better serve our clients now and in the future.”
Not Done Yet
IDS is not likely to be the last acquisition, given SMT’s growth strategy.
“We are very happy that [our first acquisition] is a company like IDS that is so similar to SMT,” says Hall. “But, at the same time, we are actively looking at opportunities for acquiring other companies that go along with our strategic vision.”